Introduced new in-store selling tools, including swatch stations, PCs
and tablets; and

Opened a second e-Commerce fulfillment center.

Alex W. Smith, President and Chief Executive Officer, stated, “Our
omni-channel transformation is largely complete and from a brand
strength and customer facing perspective we could not be more pleased
with the results. However, fiscal 2015 clearly did not turn out as we
had originally budgeted and we are very disappointed with the result.
Our job now is to use the strength of the Pier 1 Imports brand and our
investments in it to improve our profitability.”

“We are confident in the investments we have made which have allowed us
not only to build a $200+ million e-Commerce channel in just two years,
but also a platform to develop new growth vehicles and brands. In the
short term our focus is on improving the profitability of our Pier 1
Imports brand. We now have the ability to engage our customers more
frequently – through broader product offerings, expanded customer
service options, tailored merchandising and marketing strategies and
aspirational brand positioning. Pier 1 Imports’ brand health and
competitive positioning remain strong, our customer can shop however she
chooses, and we have multiple paths to grow the business and drive
improved profitability.”

Fourth Quarter Fiscal 2015 Results

Net income for the fourth quarter ended February 28, 2015, was $33.1
million, or $0.37 per share, compared to $42.6 million, or $0.41 per
share in the fourth quarter ended March 1, 2014. In the fourth quarter
of fiscal 2015, non-GAAP adjusted net income (excluding the after-tax
effect of retirement related expenses for the Company’s former chief
financial officer) was $35.1 million, or $0.39 per share (see GAAP to
non-GAAP reconciliation below). Total sales for the fourth quarter were
$543.6 million compared to $515.8 million in the same period last year.
Company comparable sales increased 5.7% (6.4% on a constant currency
basis after adjusting for a 70 basis point impact attributable to the
year-over-year devaluation of the Canadian Dollar) and reflect increases
in brand traffic and average ticket, and online conversion.

Merchandise margin (the result of adding back delivery, fulfillment and
store occupancy costs to gross profit) in the fourth quarter totaled
$302.1 million, or 55.6% of total sales, compared to $292.0 million, or
56.6% of total sales in the fourth quarter of fiscal 2014. The
year-over-year decline in merchandise margin, as a percentage of total
sales, is attributable to approximately $6.0 million of increased supply
chain expenses, primarily incremental costs incurred within the
Company’s distribution network during the quarter. Incremental costs
related to the Company’s distribution network – which impacts
merchandise margin – will be ongoing in the first quarter of fiscal
2016, and will affect the first and second quarters. Gross profit in the
fourth quarter totaled $214.4 million, or 39.4% of total sales, compared
to $214.4 million, or 41.6% of total sales in the fourth quarter of
fiscal 2014.

Fourth quarter selling, general and administrative expenses were $149.0
million, or 27.4% of total sales, compared to $133.9 million, or 26.0%
of total sales a year ago. The following table details the breakdown of
selling, general and administrative expenses for the fourth quarter of
fiscal 2015 as compared to the same period last year (in millions).

Three Months Ended

February 28, 2015

March 1, 2014

Expense

% of Sales

Expense

% of Sales

Compensation for operations

$

72.6

13.4

%

$

66.3

12.8

%

Operational expenses

18.0

3.3

%

17.8

3.5

%

Marketing

20.8

3.8

%

19.8

3.8

%

Other selling, general and administrative

37.6

6.9

%

30.1

5.8

%

Total selling, general and administrative

$

149.0

27.4

%

$

133.9

26.0

%

EBITDA (earnings before interest, taxes, depreciation and amortization)
for the fourth quarter of fiscal 2015 was $67.6 million compared to
$80.8 million for the same period in the prior year. Fourth quarter
operating income was $53.1 million compared to $70.1 million in the
fourth quarter of fiscal 2014.

Fiscal 2015 Results

For the fiscal year ended February 28, 2015, the Company reported net
income of $75.2 million, or $0.82 per share, compared to $107.5 million,
or $1.01 per share for the fiscal year ended March 1, 2014. In fiscal
2015, non-GAAP adjusted net income (excluding the after-tax effect of
retirement related expenses mentioned above) was $77.2 million, or $0.84
per diluted share (see GAAP to non-GAAP reconciliation below). Fiscal
2015 total sales increased 5.3% to $1.866 billion, from $1.772 billion
last year. Company comparable sales increased 4.7% (5.2% on a constant
currency basis after adjusting for a 50 basis point impact attributable
to the year-over-year devaluation of the Canadian Dollar) and reflect
increases in brand traffic, store and online conversion and average
ticket.

The Company generated merchandise margin of $1.081 billion, or 58.0% of
total sales, compared to $1.048 billion, or 59.2% of sales in fiscal
2014. Fiscal 2015 gross profit totaled $749.7 million, or 40.2% of total
sales, compared to $745.6 million, or 42.1% of sales in fiscal 2014.

Selling, general and administrative expenses were $576.1 million, or
30.9% of total sales, compared to $531.2 million, or 30.0% of total
sales a year ago. The following table details the breakdown of selling,
general, and administrative expenses for fiscal 2015, as compared to
fiscal 2014 (in millions).

Twelve Months Ended

February 28, 2015

March 1, 2014

Expense

% of Sales

Expense

% of Sales

Compensation for operations

$

270.4

14.5

%

$

256.4

14.5

%

Operational expenses

66.8

3.6

%

58.5

3.3

%

Marketing

101.0

5.4

%

90.2

5.1

%

Other selling, general and administrative

137.9

7.4

%

126.2

7.1

%

Total selling, general and administrative

$

576.1

30.9

%

$

531.2

30.0

%

Full year fiscal 2015 EBITDA was $176.3 million compared to $215.4
million in the prior year. Operating income was $127.3 million compared
to $175.5 million in fiscal 2014.

Balance Sheet Highlights and Share Repurchase Program

As of February 28, 2015, the Company remained in strong financial
condition with $100.1 million of cash and cash equivalents, $199.0
million outstanding under its term loan, and no cash borrowings under
its $350 million revolving line of credit. Inventories at fiscal 2015
year end totaled $478.8 million, compared to $377.7 million in the prior
year. Capital expenditures for fiscal 2015 totaled $81.9 million and
were used for infrastructure and technology development in support of ‘1
Pier 1,’ supply chain upgrades, existing store improvements and new
store openings.

“Although fiscal 2015 ending inventories are higher than originally
planned, their complexion is healthy and not believed to pose a
substantial markdown risk,” stated Mr. Smith. “We expect inventory
levels to begin to moderate as we move through the second half of fiscal
2016. Importantly, sell-through on our Easter merchandise was robust -
we anticipate that Company comparable sales growth will be approximately
4% in the first quarter, reflecting strong customer response to our
spring assortments.”

During the fiscal year ended February 28, 2015, the Company repurchased
a total of 10.3 million shares of its common stock for approximately
$173.9 million, or 10.4% of its shares of common stock outstanding as of
the start of fiscal 2015. Of the Company’s $200 million share repurchase
program announced in April 2014, $122.2 million remains available for
repurchases.

As of April 8, 2015, approximately 90.2 million shares of the Company’s
common stock were outstanding.

“In fiscal 2016 our financial priorities include implementing strict
expense controls, reducing capital expenditures and lowering store
costs. To that end, we will begin making strategic reductions to the
size of our store base as e-Commerce sales penetration continues to
increase. We anticipate these actions will help drive EBITDA dollar
growth in fiscal year 2016, and have a more pronounced effect in fiscal
year 2017. We also expect to continue to generate strong cash flow. We
plan to continue to return excess capital to shareholders through share
repurchases and cash dividends. Today we announced a 17% increase in our
quarterly dividend to $0.07 per share,” stated Mr. Smith.

Real Estate Optimization Initiative

The Company has initiated a plan to optimize its store portfolio as part
of its ‘1 Pier 1’ strategy to drive growth through its omni-channel
platform, reduce occupancy and payroll costs and improve efficiency. The
Company plans to close approximately 100 stores over the next three
years, primarily through natural lease expirations and relocations.

Laura Coffey, Executive Vice President and Interim CFO, stated, “We have
a profitable network of Pier 1 Imports stores that are central to our
competitive positioning and ability to deliver a superior customer
experience. However, as the dynamic between stores and e-Commerce
continues to evolve, we plan to selectively take advantage of natural
lease expirations to reduce occupancy costs. We have identified
approximately 100 stores which, while slightly profitable at the store
level today, when closed over a natural cycle will be accretive to
EBITDA. Within three years we expect to operate just under 1,000 retail
stores. Going forward, we will continue to refine our financial
strategy, including careful management of selling, general and
administrative expenses, to maximize profitability and cash flow.”

Mr. Smith concluded, “Looking ahead to fiscal 2017, we expect to achieve
measured top line growth, inclusive of store closures, and grow
e-Commerce sales penetration to approximately 20%. Our priority is to
leverage the investments made to date in our omni-channel business and
more purposefully manage the main operating levers of our new business
model, namely store related expenses – occupancy and payroll – and also
fulfillment costs. As e-Commerce sales, specifically fulfilled sales,
continue to grow, our execution against these levers is expected to
contribute to strong year-over-year improvement in EBITDA, operating
income and EPS.”

Fiscal 2016 Full-Year and First Quarter Financial Guidance

The Company is providing the following guidance for full-year fiscal
2016:

Company comparable sales growth, which includes e-Commerce, in the
mid-single digits;

Merchandise margin, as a percentage of sales, of 58.0% to 58.2%;

Selling, general and administrative expenses approximately flat to
slightly leveraged, as a percentage of sales, compared to fiscal 2015;

EBITDA margins comparable to fiscal 2015;

Depreciation of approximately $50 million to $55 million;

Operating income, as a percentage of sales, comparable to fiscal 2015;

Earnings per share in the range of $0.83 to $0.87, utilizing a fully
diluted share count of approximately 89 million shares; and

Capital expenditures of approximately $60 million.

The Company has provided the following guidance for the first quarter of
fiscal 2016:

Company comparable sales growth, which includes e-Commerce, of
approximately 4.0%; and

Earnings per share in the range of $0.07 to $0.08, utilizing a fully
diluted share count of approximately 90 million shares.

Fourth Quarter and Fiscal 2015 Results Conference Call

The Company will host a conference call to discuss fiscal 2015 fourth
quarter and fiscal year financial results at 3:30 p.m. Central Time
today. Investors will be able to connect to the call through the
Company’s website at www.pier1.com.
The conference call can be accessed by linking through to the “Investor
Relations” page to the “Events” page, or you can listen to the
conference call by dialing 1-800-498-7872, or if international,
1-706-643-0435. The conference ID number is 88750369.

A replay will be available after 6:00 p.m. Central Time for a 24-hour
period and the replay can be accessed by dialing 1-855-859-2056, or if
international, 1-404-537-3406 using conference ID number 88750369.

Financial Disclosure Advisory

The Company reports its financial results in accordance with U.S.
generally accepted accounting principles (GAAP). This press release
references non-GAAP financial measures including merchandise margin,
contribution from operations, EBITDA, adjusted net income and adjusted
diluted earnings per share.

The Company believes that the non-GAAP financial measures included in
this press release allow management and investors to understand and
compare results in a more consistent manner for the three- and
twelve-month periods ended February 28, 2015, and the three- and
twelve-month periods ended March 1, 2014. Non-GAAP financial measures
should be considered supplemental and not a substitute for the Company’s
results reported in accordance with GAAP for the periods presented.

A reconciliation of GAAP net income and diluted earnings per share to
non-GAAP adjusted net income and adjusted diluted earnings per share is
shown below for the three- and twelve-month periods ended February 28,
2015 (in millions except per share amounts).

Fiscal Year 2015

Three Months Ended

Twelve Months Ended

February 28, 2015

February 28, 2015

Net income (GAAP)

$

33.1

$

75.2

Add back: Retirement related expenses, net of tax (non-GAAP)

2.0

2.0

Adjusted net income (non-GAAP)

$

35.1

$

77.2

Diluted earnings per share (GAAP)

$

0.37

$

0.82

Add back: Retirement related expenses, net of tax (non-GAAP)

0.02

0.02

Adjusted diluted earnings per share (non-GAAP)

$

0.39

$

0.84

Merchandise margin represents the result of adding back delivery,
fulfillment and store occupancy costs to gross profit. Contribution from
operations represents gross profit, less compensation for operations
(which includes store and customer service payroll) and operational
expenses. EBITDA represents earnings before interest, taxes,
depreciation and amortization. Management believes merchandise margin,
contribution from operations and EBITDA are meaningful indicators of the
Company’s performance which provide useful information to investors
regarding its financial condition and results of operations. Management
uses merchandise margin, contribution from operations and EBITDA,
together with financial measures prepared in accordance with GAAP, to
assess the Company’s operating performance, to enhance its understanding
of core operating performance and to compare the Company’s operating
performance to other retailers. These non-GAAP financial measures should
not be considered in isolation or used as an alternative to GAAP
financial measures and do not purport to be an alternative to net income
or gross profit as a measure of operating performance. A reconciliation
of net income to EBITDA to contribution from operations to merchandise
margin is shown below for the periods indicated (in millions).

Three Months Ended

Twelve Months Ended

February 28, 2015

March 1, 2014

February 28, 2015

March 1, 2014

$ Amount

% of Sales

$ Amount

% of Sales

$ Amount

% of Sales

$ Amount

% of Sales

Merchandise margin (non-GAAP)

$

302.1

55.6

%

$

292.0

56.6

%

$

1,081.2

58.0

%

$

1,048.1

59.2

%

Less:

Delivery and fulfillment costs

12.3

2.3

%

4.4

0.9

%

32.9

1.8

%

14.0

0.8

%

Store occupancy

75.4

13.9

%

73.2

14.2

%

298.7

16.0

%

288.4

16.3

%

Gross profit (GAAP)

214.4

39.4

%

214.4

41.6

%

749.7

40.2

%

745.6

42.1

%

Less:

Compensation for operations

72.6

13.4

%

66.3

12.8

%

270.4

14.5

%

256.4

14.5

%

Operational expenses

18.0

3.3

%

17.8

3.5

%

66.8

3.6

%

58.5

3.3

%

Contribution from operations (non-GAAP)

123.8

22.8

%

130.4

25.3

%

412.5

22.1

%

430.7

24.3

%

Less:

Other nonoperating income/expense

(2.1

)

(0.4

%)

(0.3

)

(0.1

%)

(2.8

)

(0.1

%)

(1.0

)

(0.1

%)

Marketing and other SG&A

58.4

10.7

%

49.8

9.7

%

238.9

12.8

%

216.4

12.2

%

EBITDA (non-GAAP)

67.6

12.4

%

80.8

15.7

%

176.3

9.5

%

215.4

12.2

%

Less:

Income tax provision

19.5

3.6

%

27.3

5.3

%

45.2

2.4

%

67.1

3.8

%

Interest expense, net

2.7

0.5

%

0.5

0.1

%

9.6

0.5

%

1.8

0.1

%

Depreciation and amortization

12.3

2.2

%

10.4

2.0

%

46.3

2.5

%

38.9

2.2

%

Net income (GAAP)

$

33.1

6.1

%

$

42.6

8.3

%

$

75.2

4.0

%

$

107.5

6.1

%

This press release may be deemed to include forward-looking statements
that are based on management’s current estimates or expectations of
future events or future results. These statements are not historical in
nature and can generally be identified by such words as “believe,”
“expect,” “estimate,” “anticipate,” “plan,” “may,” “will,” “intend” and
similar expressions. Management’s expectations and assumptions regarding
future results are subject to risks, uncertainties and other factors
that could cause actual results to differ materially from the
anticipated results or other expectations expressed in the
forward-looking statements included in this press release. These risks
and uncertainties include, but are not limited to, consumer spending
patterns, inventory levels and values, the Company’s ability to
implement planned cost control measures, expected benefits from the real
estate optimization initiative, including cost savings and increases in
efficiency, and changes in foreign currency values relative to the U.S.
Dollar. These and other factors that could cause results to differ
materially from those described in the forward-looking statements
contained in this press release can be found in the Company’s Annual
Report on Form 10-K and in other filings with the SEC. Refer to the
Company’s most recent SEC filings for any updates concerning these and
other risks and uncertainties that may affect the Company’s operations
and performance. Undue reliance should not be placed on forward-looking
statements, which are only current as of the date they are made. The
Company assumes no obligation to update or revise its forward-looking
statements.

Pier 1 Imports, Inc. is the original global importer of home décor and
furniture. Information about the Company is available on www.pier1.com.

(Financials Attached)

Pier 1 Imports, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands except per share amounts)

(unaudited)

Three Months Ended

February 28,

% of

March 1,

% of

2015

Sales

2014

Sales

Net sales

$

543,600

100.0

%

$

515,786

100.0

%

Cost of sales

329,158

60.6

%

301,350

58.4

%

Gross profit

214,442

39.4

%

214,436

41.6

%

Selling, general and administrative expenses

149,028

27.4

%

133,894

26.0

%

Depreciation and amortization

12,272

2.2

%

10,412

2.0

%

Operating income

53,142

9.8

%

70,130

13.6

%

Nonoperating (income) and expenses:

Interest, investment income and other

(2,500

)

(505

)

Interest expense

3,044

726

544

0.1

%

221

0.0

%

Income before income taxes

52,598

9.7

%

69,909

13.6

%

Income tax provision

19,509

3.6

%

27,317

5.3

%

Net income

$

33,089

6.1

%

$

42,592

8.3

%

Earnings per share:

Basic

$

0.37

$

0.42

Diluted

$

0.37

$

0.41

Dividends declared per share:

$

0.06

$

0.06

Average shares outstanding during period:

Basic

88,426

101,430

Diluted

89,421

103,024

Pier 1 Imports, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands except per share amounts)

(unaudited)

Twelve Months Ended

February 28,

% of

March 1,

% of

2015

Sales

2014

Sales

Net sales

$

1,865,782

100.0

%

$

1,771,743

100.0

%

Cost of sales

1,116,076

59.8

%

1,026,180

57.9

%

Gross profit

749,706

40.2

%

745,563

42.1

%

Selling, general and administrative expenses

576,131

30.9

%

531,190

30.0

%

Depreciation and amortization

46,304

2.5

%

38,873

2.2

%

Operating income

127,271

6.8

%

175,500

9.9

%

Nonoperating (income) and expenses:

Interest, investment income and other

(3,391

)

(1,721

)

Interest expense

10,260

2,572

6,869

0.4

%

851

0.0

%

Income before income taxes

120,402

6.4

%

174,649

9.9

%

Income tax provision

45,240

2.4

%

67,118

3.8

%

Net income

$

75,162

4.0

%

$

107,531

6.1

%

Earnings per share:

Basic

$

0.83

$

1.03

Diluted

$

0.82

$

1.01

Dividends declared per share:

$

0.24

$

0.21

Average shares outstanding during period:

Basic

91,081

104,121

Diluted

92,128

106,248

Pier 1 Imports, Inc.

CONSOLIDATED BALANCE SHEETS

(in thousands except share amounts)

(unaudited)

February 28,

March 1,

2015

2014

ASSETS

Current assets:

Cash and cash equivalents, including temporary investments of
$69,572 and $121,446, respectively

$

100,064

$

126,695

Accounts receivable, net

29,405

24,614

Inventories

478,843

377,650

Prepaid expenses and other current assets

45,851

47,547

Total current assets

654,163

576,506

Properties, net of accumulated depreciation of $446,237 and
$424,246, respectively